Buss1 Flash Cards

A process through which a business increases the worth of the resources included in production so that customers perceive the product to be worth more than the cost of the inputs.

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What is a Adviser?

An external contact of a business that provides support and advice, sometimes for free.

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What is a bank loan?

A fixed amount loan from a bank which is generally used to finance long-term assets.

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What is a bank overdraft?

Borrowings from a bank on a current account which are payable on demand.

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Define Breakeven output (or point).

The point at which the total sales of a business equal total costs -i.e. the business is making neither a profit nor a loss.

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What is a budget?

A detailed plan of income and expenses expected over a certain period of time.

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What is a Business angel?

A particular type of investor, usually a successful entrepreneur, who is willing to invest in high-risk, high-growth firms at a very early stage.

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What is a business plan?

A detailed description of a new or existing business, including the company’s strategy, aims and objectives, marketing & financial plan.

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What is a business objective?

A stated goal or target of a business (note: a business can have more than one objective).

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Define cash flow.

The movements of cash into (“inflows”) and out of (“outflows”) a business.

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What is a cash flow forecast?

A projection, usually by week or month, of the likely cash inflows and outflows in a business.

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Define contribution.

The difference between total sales and total variable costs.

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What is contribution per unit?

A key number for breakeven analysis: the difference between selling price per unit and variable cost per unit.

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Define costs.

Amounts incurred by a business as a result of its trading operations.

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What is demand?

The amount of a product or service that customers are willing and able to pay at a given time.

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What is demographic?

Defining a market in terms of social-economic factors such as segmentation age, income, class etc.

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What is Elasticity of demand?

The responsiveness of demand to a change in price or incomes.

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Define Electronic market.

A market in which buyers and sellers are brought together using digital means of communication (e.g. online) in order to exchange information (e.g. prices) and conduct transactions. Compare with physical markets where buyers and sellers meet face to

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Define enterprise.

The process by which new businesses are formed in order to offer products and services in a market.

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What is a entrepreneur?

An individual who sets up and runs a new business and takes on the risks associated with the business.

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What is a Expenditure budget?

The budget which sets out the expected costs to be incurred by the firm, usually split into various categories (e.g. production, marketing, administration).

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Define fixed costs.

Costs that do not vary with the level of output – e.g. rent, salaries)Franchisee The person or company which operates a franchised business format - under licence from a franchisor

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What is a franchisor?

The owner of a business format (franchise) which is licensed out to othr people or businesses (franchisees).

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What is a full-time employee?

An employees who works more than 30 hours a week in a business (compare with part-time, which is working for less than 30 hours).

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what is a income budget?

The budget which sets out estimates of the likely demand for and value of the firms sales.

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Define inputs.

The resources (land, labour, capital, enterprise) that go into producing goods and services.

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Define Limited liability.

Shareholders are only liable for the money they have invested - not for the overall debts and liabilities of their company.

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Define business location.

The place (or places) from which a firm does business. Can be both a physical location and also virtual.

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Define margin of safety.

The difference between the actual level of output and the break even output.

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What is a market?

Any place (e.g. physical, electronic) where buyers and sellers come together with a view to exchanging transactions.

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What is market growth?

The percentage growth in the size of the market, measured over a specific period.

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What is market research?

The process of planning, collecting, and analysing data relevant to help make marketing decisions.

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What is Market segmentation?

The process of dividing a market into smaller sections (segments) segmentation which contain customers with similar needs and wants.

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Define market share.

The share of the total market that is owned by a particular business, product or brand. Usually expressed in percentage terms. The firm with the largest percentage market share is known as the market leader..

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Define market size.

The total value or quantity of demand in a specific market over a specific period of time. Can be measured in value terms (e.g. sales) or in terms of quantities (e.g. units) bought or sold.

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Define niche market.

A smaller part of a larger market in which customers have more specific needs and wants.

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What is opportunity cost?

The cost of a decision as measured by the benefits foregone of the next best alternative.

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What is a patent?

The right to be the only user of producer of a specified product or process.

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What is a permanent employee?

An employee who is employed on a formal employment contract and remains with the firm for an open-ended period until the contract is ended. Compare with a temporary employee (“temp”) who is employed for a shorter, time-limited period.

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What is primary research?

The market research that involves the collection of data that does not yet exist.